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The Supreme Court strips the SEC of a critical enforcement tool in fraud cases
Court Watch |
2024/07/02 10:30
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The Supreme Court on Thursday stripped the Securities and Exchange Commission of a major tool in fighting securities fraud in a decision that also could have far-reaching effects on other regulatory agencies.
The justices ruled in a 6-3 vote that people accused of fraud by the SEC, which regulates securities markets, have the right to a jury trial in federal court. The in-house proceedings the SEC has used in some civil fraud complaints, including against Houston hedge fund manager George Jarkesy, violate the Constitution, the court said.
“A defendant facing a fraud suit has the right to be tried by a jury of his peers before a neutral adjudicator,” Chief Justice John Roberts wrote for the court’s conservative majority.
Justice Sonia Sotomayor, who read from her dissent in the courtroom, said that “litigants who seek to dismantle the administrative state” would rejoice in the decision.
Federal agencies that oversee safety in mines and other workplaces are among many that can only impose civil penalties in in-house, administrative proceedings, Sotomayor wrote, joined by Justices Ketanji Brown Jackson and Elena Kagan.
“For those and countless other agencies, all the majority can say is tough luck; get a new statute from Congress,” she wrote.
The case is among several this term in which conservative and business interests are urging the nine-member court to constrict federal regulators. The court’s six conservatives already have done so, including in a decision last year that sharply limited environmental regulators’ ability to police water pollution in wetlands.
Still awaiting decision are cases calling on the court to overturn the 40-year-old ruling colloquially known as Chevron, which has made it easier to sustain regulation of the environment, public, health, worker safety and consumer protection. Some of the same parties that supported Jarkesy at the Supreme Court are calling for Chevron to be overturned.
The SEC was awarded more than $5 billion in civil penalties in the 2023 government spending year that ended Sept. 30, the agency said in a news release. It was unclear how much of that money came through in-house proceedings or lawsuits in federal court.
The agency had already reduced the number of cases it brings in administrative proceedings pending the Supreme Court’s resolution of the case.
The high court rejected arguments advanced by President Joe Biden’s Democratic administration that relied on a 50-year-old decision in which the court ruled that in-house proceedings did not violate the Constitution’s right to a jury trial in civil lawsuits.
The justices ruled in favor of Jarkesy after the SEC appealed a decision in which the New Orleans-based 5th U.S. Circuit Court of Appeals threw out stiff financial penalties against Jarkesy and his Patriot28 investment adviser.
The appeals court found that the SEC’s case against Jarkesy, resulting in a $300,000 civil fine and the repayment of $680,000 in allegedly ill-gotten gains, should have been heard in a federal court instead of before one of the SEC’s administrative law judges. |
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Israel’s high court orders the army to draft ultra-Orthodox men
Stock Market News |
2024/06/27 16:46
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Israel’s Supreme Court on Tuesday ruled unanimously that the military must begin drafting ultra-Orthodox men for compulsory service, a landmark decision that could lead to the collapse of Prime Minister Benjamin Netanyahu’s governing coalition as Israel continues to wage war in Gaza.
The historic ruling effectively puts an end to a decades-old system that granted ultra-Orthodox men broad exemptions from military service while maintaining mandatory enlistment for the country’s secular Jewish majority. The arrangement, deemed discriminatory by critics, has created a deep chasm in Israel’s Jewish majority over who should shoulder the burden of protecting the country.
The court struck down a law that codified exemptions in 2017, but repeated court extensions and government delaying tactics over a replacement dragged out a resolution for years. The court ruled that in the absence of a law, Israel’s compulsory military service applies to the ultra-Orthodox like any other citizen.
Under longstanding arrangements, ultra-Orthodox men have been exempt from the draft, which is compulsory for most Jewish men and women, who serve three and two years respectively as well as reserve duty until around age 40.
These exemptions have long been a source of anger among the secular public, a divide that has widened during the eight-month-old war, as the military has called up tens of thousands of soldiers and says it needs all the manpower it can get. Over 600 soldiers have been killed since Hamas’ Oct. 7 attack.
Politically powerful ultra-Orthodox parties, key partners in Netanyahu’s governing coalition, oppose any change to the current system. If the exemptions are ended, they could bolt the coalition, causing the government to collapse and likely leading to new elections at a time when its popularity has dropped.
In the current environment, Netanyahu could have a hard time delaying the matter any further or passing laws to restore the exemptions. During arguments, government lawyers told the court that forcing ultra-Orthodox men to enlist would “tear Israeli society apart.”
A statement from Netanyahu’s Likud party criticized the ruling, saying a bill in parliament backed by the Israeli leader would address the draft issue. Critics say it falls short of Israel’s wartime needs.
“The real solution to the draft problem is not a Supreme Court ruling,” the statement said.
In its ruling, the court found that the state was carrying out “invalid selective enforcement, which represents a serious violation of the rule of law, and the principle according to which all individuals are equal before the law.”
It did not say how many ultra-Orthodox should be drafted, but the military has said it is capable of enlisting 3,000 this year.
Some 66,000 ultra-Orthodox men are now eligible for enlistment, according to Shuki Friedman, an expert on religion and state affairs and the vice-president of the Jewish People Policy Institute, a Jerusalem think tank.
The ruling of Israel’s highest court must be followed, and the military is expected to begin doing so once it forms a plan for how to draft thousands of members of a population that’s deeply opposed to service, and which follows a cloistered and modest lifestyle the military may not be immediately prepared to accommodate. The army had no immediate comment. |
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Supreme Court will take up state bans on gender-affirming care for minors
Court Watch |
2024/06/24 15:22
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The Supreme Court on Monday jumped into the fight over transgender rights, agreeing to hear an appeal from the Biden administration seeking to block state bans on gender-affirming care.
The justices’ action comes as Republican-led states have enacted a variety of restrictions on health care for transgender people, school sports participation, bathroom usage and drag shows. The administration and Democratic-led states have extended protections for transgender people, including a new federal regulation that seeks to protect transgender students.
The case before the high court involves a law in Tennessee that restrict puberty blockers and hormone therapy for transgender minors. The federal appeals court in Cincinnati allowed laws in Tennessee and Kentucky to take effect after they had been blocked by lower courts. (The high court did not act on a separate appeal from Kentucky.)
“Without this Court’s prompt intervention, transgender youth and their families will remain in limbo, uncertain of whether and where they can access needed medical care,” lawyers for the transgender teens in Tennessee told the justices.
Actor Elliot Page, the Oscar-nominated star of “Juno,” “Inception” and “The Umbrella Academy,” was among 57 transgender people who joined a legal filing in support of Supreme Court review.
Arguments will take place in the fall. Last month, South Carolina became the 25th state to adopt a law restricting or banning gender-affirming medical care for transgender minors, even though such treatments have been available in the United States for more than a decade and are endorsed by major medical associations.
Most of the state restrictions face lawsuits. The justices had previously allowed Idaho to generally enforce its restrictions, after they had been blocked by lower courts.
At least 24 states have laws barring transgender women and girls from competing in certain women’s or girls’ sports competitions. At least 11 states have adopted laws barring transgender girls and women from girls’ and women’s bathrooms at public schools, and in some cases other government facilities. |
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Court rejects settlement in water dispute between New Mexico and Texas
Topics in Legal News |
2024/06/21 12:02
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The Supreme Court on Friday rejected a settlement between Western states over the management of one of North America’s longest rivers.
The 5-4 decision rebuffs an agreement that had come recommended by a federal judge overseeing the case over how New Mexico, Texas and Colorado must share water from the Rio Grande. The high court found that the federal government still had claims about New Mexico’s water use that the settlement would not resolve.
U.S. Circuit Judge Michael Melloy had called the proposal a fair and reasonable way to resolve the conflict between Texas and New Mexico that would be consistent with a decadeslong water-sharing agreement between the two states as well as Colorado.
The federal government, though, lodged several objections, including that the proposal did not mandate specific water capture or use limitations within New Mexico.
New Mexico officials have said implementing the settlement would require reducing the use of Rio Grande water through a combination of efforts that range from paying farmers to leave their fields barren to making infrastructure improvements. Some New Mexico lawmakers have voiced concerns, but the attorney general who led the state’s negotiations had called the agreement a victory.
Farmers in southern New Mexico have had to rely more heavily on groundwater wells over the last two decades as drought and climate change resulted in reduced flows and less water in reservoirs along the Rio Grande. Texas sued over the groundwater pumping, claiming the practice was cutting into the amount of water that was ultimately delivered as part of the interstate compact.
The proposed settlement would recognize several measurements to ensure New Mexico delivers what’s owed to Texas. New Mexico, meanwhile, agreed to drop its challenges against Texas in exchange for clarifying how water will be accounted for as it flows downstream. The agreement also outlined transfers if not enough or too much water ended up in Texas. |
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US soldier sentenced to nearly 4 years in Russian penal colony for theft
Headline Legal News |
2024/06/19 11:42
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A court in Russia’s far eastern city of Vladivostok on Wednesday convicted a visiting American soldier of stealing and making threats of murder, and it sentenced him to three years and nine months in prison.
Staff Sgt. Gordon Black, 34, flew to the Pacific port city to see his girlfriend and was arrested last month after she accused him of stealing from her, according to U.S. officials and Russian authorities.
Russia’s state news agencies Tass and RIA Novosti reported that the judge in Pervomaisky District Court in Vladivostok also ordered Black to pay 10,000 rubles ($115) in damages. Prosecutors had asked for a sentence of four years and eight months in prison.
Black’s case occurs amid tensions over Russia’s arrests of American journalists and other U.S. nationals as the fighting in Ukraine continues.
Russia has jailed a number of Americans, including corporate security executive Paul Whelan and Wall Street Journal reporter Evan Gershkovich. The U.S. government has designated both men as wrongfully detained and has been trying to negotiate their release.
Others detained include Travis Leake, a musician who has been living in Russia for years and was arrested last year on drug-related charges; Marc Fogel, a teacher in Moscow who was sentenced to 14 years in prison, also on drug charges; and dual nationals Alsu Kurmasheva and Ksenia Khavana.
The U.S. State Department strongly advises American citizens not to go to Russia.
Black was on leave and in the process of returning to his home base at Fort Cavazos, Texas, from South Korea, where he had been stationed at Camp Humphreys with the Eighth Army.
Cynthia Smith, an Army spokesperson, said Black signed out for his move back home and, “instead of returning to the continental United States, Black flew from Incheon, Republic of Korea, through China to Vladivostok, Russia, for personal reasons.”
Under Pentagon policy, service members must get clearance for any international travel from a security manager or commander.
The U.S. Army said last month that Black hadn’t sought such travel clearance and it wasn’t authorized by the Defense Department. Given the hostilities in Ukraine and threats to the U.S. and its military, it is extremely unlikely he would have been granted approval. |
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Investment Fraud Litigation |
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Securities fraud, also known as stock fraud and investment fraud, is a practice that induces investors to make purchase or sale decisions on the basis of false information, frequently resulting in losses, in violation of the securities laws. Securities Arbitration. Generally speaking, securities fraud consists of deceptive practices in the stock and commodity markets, and occurs when investors are enticed to part with their money based on untrue statements.
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The content contained on the web site has been prepared by Securities Law News as a service to the internet community and is not intended to constitute legal advice or a substitute for consultation with a licensed legal professional in a particular case. | Affordable Law Firm Website Design by Law Promo |
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